Gold had another record-setting day on Wednesday, climbing higher even as the dollar rose slightly.
Gold for February delivery jumped as high as $1,218.40 before settling up $12.80 at $1,213 an ounce on the New York Mercantile Exchange.
Investors have been piling into gold in recent months as a hedge against a falling dollar. But the gains on Wednesday came even as the dollar inched up against other major currencies thanks to continuing strong demand from investors.
"The momentum is still there in gold," said William Rhind, strategic director of ETFS Marketing, a provider of commodity ETFs.
Gold is a unique commodity since is valued as an alternative investment to currencies as well as a safe haven. Other commodities, like copper and oil, are more closely tied to the strength of the economy and supply-demand issues.
Rhind said the rally in gold should continue over the long term since it stands to benefit under most economic scenarios.
If the economic recovery is slow and subdued, as many expect, the Federal Reserve will likely keep interest rates low which in turn will hurt the dollar and drive investors to buy more gold. However if the recovery picks up pace and the Fed raises interest rates to combat inflation, the dollar could strengthen, potentially upsetting the nine-month rally on the stock market and increasing demand for safe-haven investments.
Many analysts still believe a short-term correction in gold is possible, considering the 33 percent per-ounce gain gold has seen since July.
Other metals rose along with gold on Wednesday. March silver rose as high as $19.47 an ounce _ its highest level since July of last year. The contract settled up 11.5 cents at $19.325 an ounce. March copper, meanwhile, hit its highest point since September 2008, rising to $3.273 before settling at $3.2585 a pound, up 2.75 cents from Tuesday.
December platinum gained $19.60 to $1,505.30 an ounce.
Elsewhere on the Nymex, energy prices fell after the Energy Information Administration said oil supplies unexpectedly grew last week. The report also said the amount of gasoline in storage surged by 4 million barrels as refineries continue to cut back on production because of weak demand.
Light, sweet crude for January delivery dropped $1.77, or more than 2 percent, to settle at $76.60 a barrel.
Heating oil for January delivery fell 4.16 cents to settle at $2.0364 a gallon, while January gasoline futures lost 4.95 cents to $1.9928 a gallon.
Grain prices slumped on the Chicago Board of Trade. March wheat futures fell 8 cents to $5.76 a bushel. Corn for March delivery also lost 8 cents to $4.065 a bushel.
January soybeans tumbled 25.5 cents to $10.34 a bushel.
Other soft commodities, including cotton, coffee, cocoa and sugar, rose.